With respect to the banking union, Hungary supports the position according to which speed should not be to the detriment of quality – emphasized Enikő Győri, Minister of State of the Ministry of Foreign Affairs responsible for European Affairs after the meeting of the General Affairs Council on 16th October 2012 in Luxembourg.

In her statement to Hungarian New Agency MTI, Enikő Győri explained that the Member State representatives met to prepare the EU Summit envisaged for the latter part of this week.

The Minister of State mentioned that the European Commission’s original proposal on the banking union disregarded the interests of countries that are not part of the Eurozone but as she explained progress in the positive direction was achieved in this respect.

The Minister of State reiterated again that Hungary does not object to a closer cooperation between Member States in the Eurozone, but all this is only conceivable if this does not mean that countries outside of the Eurozone - especially those who upon their accession, undertook the obligation to introduce the common currency – are not disadvantaged by this and that this whole process will not be to the detriment of the Single Market and the integrity of the EU.

With respect to the banking union and the envisaged joint bank supervision, the Minister of State pointed out that rights and obligations have to be in balance, if a country decides to join and that equal standards should also apply in the field of guarantees.

According to the European Commission’s proposal in September, Eurozone banks under joint supervision, if in trouble, can turn directly to the European Stability Mechanism for resources, while banks of non-Eurozone countries, would not have this option. The other debated point is related to voting rights, because currently only members of the Eurozone have voting rights in the Governing Board of the European Central Bank, that performs the role of joint supervision. The preliminary report published by the Council last week already emphasizes the importance of strict separation between monetary policy and supervisory roles, as well as the importance of balancing rights and obligations.

Responding to the question of MTI, if she saw any chance for the joint banking supervision to start its operations on 1st January as the Commission proposed this, Enikő Győri explained that certain countries, especially the ones that would like to enjoy the benefits of this as soon as possible, would like to push for an agreement. “However we should not approve a makeshift solution” or any solution that does balance between the countries inside and outside of the Eurozone – said the Minister of State. According to her, there is no agreement between countries using the Euro whether to extend joint banking supervision – as the European Commission proposes -  from 2014 to all the, approximately 6000 banks of the Eurozone or only to those who by virtue of their size would pose a systemic risk. The European Commission is on the opinion that this is not dependant on the size of the bank; a smaller bank can also create great problems.

At the same time the Minister of State firmly agreed with the Council that beside the closer harmonisation of the banking union, the “fiscal capacities” and economic policies, the democratic oversight and accountability of a “real economic and monetary union” is also important. “It is not possible to deepen any EU cooperation without it having democratic foundations, thus national parliaments should also be involved more intensively in these issues” –said the Minister of State of the Ministry of Foreign Affairs responsible for European Affairs to MTI.

(Prime Minister’s Office)